The State Of Unemployment In Albania Economics Essay

Albania is one of the economically last developed states in Europe. After the prostration of the Communist government, Albania achieved an economical growing, but poverty degree is still high. There is a strong nexus between poorness and unemployment because the deficiency of employment is one of the chief determiners of poorness. Albania is considered as a hapless state, that ‘s why a high degree of unemployment exists. This is a phenomenon that disquiets the Albania ‘s society, so it is of import to discus about this subject.

This paper gives the unemployment degree and its changing during old ages in Albania. The period of clip that we have taken into history is 1995-2009.

In this paper we are traveling to speak about the unemployment ‘s construct at the beginning and so its effects on the economic system and society in chapter 5. We are traveling to give the unemployment rate of Albania, during this period harmonizing to age, gender and instruction and its values in different metropoliss in chapter 3. Another point that will be shown in this paper is of class the safeguards taken by the authorities to cut down the unemployment rate given in chapter 6. And eventually we are traveling to demo the decisions of our work.

GENERAL OVERVIEW ABOUT UNEMPLOYMENT

2.1. Unemployment ‘S CONCEPT

Unemployment is the clip period when a individual is n’t really working, but available for work and presently looking for work. The on the job age population includes people from 16 old ages old to 65 old ages old for work forces and 60 for adult females. It consists of two groups: active population ( labour force ) and inactive population.

Fig.1 The distribution of population in working age

Unemployed

Labor force

Employed

Inactive population

Working age population 16-65 ( work forces ) , 16-60 ( adult females )

Beginning: Own creative activity

Labor force includes employed and those in hunt of employment ( the unemployment people ) . In this appraisal should be taken into history the difference between:

-Individuals presently working, considered those who accomplish a collectible work of abode, even if temporally absent from work.

– The unemployed, those considered non at work, but actively seeking employment or waiting to return to work.

Outside the labour force are classified people that are in working age but they are n’t presently working or they do n’t desire to.A This group consists of pupils, the shut-ins, pupils of working age, those who perform military service, and individuals non presently looking for work.

The flow of motion between these classs can be expressed with the Fig.2, where:

Fig.2: The motion between inactive population and labour force

Inactive population

Employed

1

2

3

4

5

7

6

Unemployed

Beginning: Scribd1

1 i? shows the flow of people who change occupation.

2 i? show the flow of people who lose their occupation.

3 i? show the flow of people from the ranks of unemployed who find a occupation.

4 i? show the outgrowth of the unemployed out of the labour force ( as unemployed who do non necessitate work any longer ) .

5 i? show the entry or the reentry in labour force, but foremost as unemployed.

6 i? show entry or reentry in labour force, but now as busy at work.

7 i? show the loss of employment and the issue out of the labour force ( such as pensionaries, or people returning to school ) .

The entire figure of losing occupations is given by the sum of motion 1, 2 and 7.

The entire figure of happening occupations is given by the sum of motion is 1, 3 and 6.

The difference between the losing occupations and the determination occupations shows the difference in employment.

Changes in unemployment are given by the difference ( 5+2 ) – ( 3+4 ) .

Changes in unemployment measured by the unemployment rate, which represents the per centum ratio of the figure of unemployed and the labour force:

Unemployment rate= ( unemployed workers / entire labour force ) A- 100 % .1

TYPES OF UNEMPLOYMENT

Unemployment is an inevitable procedure for each state, so that we can happen it among each individual in different sorts. The most sort of unemployment we can happen in Albania are:

Frictional unemployment, which is created as a consequence of continued motion of workers from one occupation in hunt of another occupation, which is better than the first. This sort of unemployment is inevitable and economically justifiable, as taking to more efficient redistribute of labour resources. In this group are besides included pupils who have merely been graduated and are looking for a occupation, or adult females that have been off for a piece from the labour market. These people are considered as voluntaries unemployed.1

Structural unemployment, that occurs due to alterations in demand and the supply to work as a consequence of cardinal alterations happening in the basic subdivisions of economic system. If an economic system suffers from durable low aggregative demand, it means that many of the unemployed become disheartened, while their accomplishments ( including job-searching accomplishments ) become “ rusty ” and obsolete. This means that they may non suit the occupation vacancies that are created when the economic system recovers. This sort of unemployment can besides be caused by technological advancements, since it means that fewer workers are needed to bring forth the same degree of end product every year.1

Cyclic unemployment is associated with worsening demand for certain goods and services, particularly at the phase of economic downswing, which leads to the diminution in demand for work force in the mills that manufacture these merchandises or services. This is caused by a concern rhythm recession and rewards non falling to run into the equilibrium level.1

Seasonal unemployment, which is related to seasonal nature of the merchandise or service, for illustration in the subdivisions of the building industry, touristry, etc. It is linked to certain sort of jobs.1

Voluntary unemployment includes that group of people who choose non to work for different grounds, such as economical/financial grounds or any other.1

Hidden unemployment is the unemployment that does non look in authorities statistics, due to the manner the statistics are collected. Merely those who have no work but are actively looking for work are counted as unemployed. Those who have given up looking, those who are working less than they would wish or those who work at occupations in which their accomplishments are underutilized are non officially counted as unemployed, though in a sense they are.1

UNEMPLOYMANT RATE IN ALBANIA

Year

Unemployment rate ( % )

1995

12.9

1996

12.3

1997

14.9

1998

17.7

1999

18.4

2000

16.8

2001

16.4

2002

15.8

2003

15.0

2004

14.4

2005

14.1

2006

13.8

2007

13.5

2008

13.0

Table1: The unemployment rate in Albania ( during old ages )

Beginning: INSTAT2 ( 2008 )

As we can see on Table1, the lowest rate of unemployment of these old ages is 12.3 % in 1996, while the highest is 18.4 % in 1999. From 1995 until 1999 we have consecutive ups and downs of the unemployment rate. This is due of the passage that in these old ages has been higher. While from 1999 with unemployment rate 18.4 % , the unemployment rate has been diminishing bit by bit, making its lowest degree in 2008 with unemployment rate 13 % . However these figures are still high. Our state suffers from the phenomenon of unemployment.

Harmonizing to the study of the Central Intelligence Agency ( CIA ) 3 official unemployment rate is instead distorted three times lower than the existent rate of unemployment.A There are at least three grounds that make the information on unemployment rate non to be real.A The chief ground is informality, which is the figure of employees who are n’t declared from the employer.

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1scribd: MAKROEKONOMI-Inflacioni-Dhe-Papunesia. Url: hypertext transfer protocol: //www.scribd.com/doc/33883062/MAKROEKONOMI-Inflacioni-Dhe-Papunesia

2 INSTAT see Instituti I Statistikes

3 CIA ( 2010 ) : library/publications/the-world-factbook/Albania. Url: hypertext transfer protocol: //www.cia.gov/library/publications/the-world-factbook/geos/al.html

A Besides, there are the unemployed who do non plead their ego as unemployed.A In this instance they do non look in official records as unemployed. This is a job associated with deficiency of functionality and efficiency of office work. In the computation of the unemployment rate besides is n’t forgotten unemployment in agribusiness. Rural countries, in which lies the chief map of poorness in the state, are supposed with full employment, since no 1 is registered as unemployed.

Harmonizing to the study, holding such a big labour force in agribusiness, when this sector provides 21.7 % of Gross Domestic Product and about zero unemployment rate, it ‘s explained why harmonizing the official methodological analysis, the unemployment rate is merely 12.5 % .A So, these are some of the grounds that make the unemployment rate non to be existent.

Unemployment RATE harmonizing to gender

Fig 3: The per centum of unemployed males and females over old ages

Beginning: INSTAT ( 2008 ) and ain computation.

Throughout the old ages the per centum of unemployed females in Albania has been higher than the per centum of males, this for some grounds. In Albania are developed more activities oriented towards the employment of males.A Specifically, trade, building or development of hotels and eating houses, where rule male employees. Besides these old ages were closed plenty industrial activities, in which there were employed a important figure of females.

While the rural-urban motion does non give females many chances coming from rural countries to come in in the occupation market. Besides females being most charged with house plants and take attention of everything, no house has no involvement to use them before a male, because they frequently can take permissions, will necessitate pregnancy leave etc. These can be some of the grounds why the degree of unemployed females is higher than the unemployed males.

The twelvemonth 1999, in which the unemployment rate is the highest, marks the greatest figure of unemployed males and females, severally 16.4 % of males and 21.4 % of females in Albania were recorded as unemployed.

While the lowest figure of unemployed males registered in 1996, where 11.4 % of males are registered as unemployed and the lowest figure of unemployed females registered in 2007 where 12.2 % of females are registered as unemployed.

The figure of unemployed people observed that has ups and downs, both in females and males until 2000, while after 2000 boulder clay 2007 is observed a general decrease of unemployed males and females. In 2008 is noticed an addition in the figure of unemployed females from 12.2 % to 13.5 % .

Unemployment RATE harmonizing to age

Fig 4: Unemployment rate harmonizing age

Beginning: INSTAT ( 2009 ) and ain computation.

Unemployment besides varies harmonizing to age groups population. Three chief age groups are: 15-19 old ages old, 20-34 old ages old and over 34 old ages old. Unemployment appears in higher rates for the first age group because immature people are lessA able to accommodate to the labour market. These rates have been high boulder clay 2001 and after this period dominates 20-34 twelvemonth old age group as unemployed. Whereas all individuals over 34 old ages old represent lower values in the unemployment rate since the bulk of them are busy to work. This rate has been higher in the period 1998-2001 and since so has maintained a changeless degree.

Unemployment RATE harmonizing to instruction

Fig 5: Unemployment rate harmonizing educationSource: INSTAT ( 2009 ) and ain computation.

Harmonizing to the instruction degree of unemployment, the major portion of unemployment rate consists of people who have octennial and high-school instruction. This may come from different grounds such as the low degree of intelligence, or any other. The difference rate between unemployed people with octennial and high-school instruction is low. In the period of clip 1998-2000 there were more unemployed people who had high school instruction than with octennial instruction, but since 2001 this ratio has changed. From 2001-2009 there are more unemployed people with octennial instruction. Whereas people with university instruction have fewer opportunities to be unemployed since they have more chance to happen o occupation.

Unemployment Rate in different territories

Fig 6: The per centum of unemployment in different territories

Beginning: Ministry of Social Work and Issue and Equal Opportunity ( 2008 ) and ain computation.

Unemployment rate varies in different territories of Albania. During 2008 this rate was different in different territories. Its values are shown in Fig 6, which represents the ratio of unemployment to the all territories of Albania. Harmonizing to the information set, the highest rate for the unemploymentA this twelvemonth has been in Kukes with a value of 30.9 % , a high value compared to the other territories. It is followed by the territory of Shkodra with 24.2 % , so Lezha with 22.1 % and 17.7 % in Vlora. The lowest rate is given for the territory of Tirana, around 7.3 % . It likely comes from the fact that, Tirana is the capital and so on is a developed metropolis, where employment chances for citizens are higher. Therefore this rate is lower in this city.A As for other territories this rate varies with little values.

Consequences OF UNEMPLOYMENT IN ALBANIA

Unemployment causes a batch of single and societal costs. A long period of unemployment reduces the human capital value and increases to malnutrition, unwellness, mental emphasis, and loss of self-esteem, taking to depression. Besides another effect of unemployment is that the unemployed people may lose their accomplishments. At another point when a individual is unemployed, he has deficiency of income. This causes less leisure. As some other serious effects of unemployment we can advert the increasing figure of divorces, offense and greater intoxicant maltreatment. So the unemployment influences in the every-day life of the unemployed people.

Unemployment causes decrease of incomes flat and this brings the decrease of the state ‘s economic growing. The GDP is lower than it could be if the unemployed people were employed. As a consequence the whole economic system and society suffer from people being unemployed. Besides high degrees of unemployment bring effects at the degree of revenue enhancements and authorities adoption, and at the outgo of authorities. Because of the being of a high degree of unemployment, the income that could be taken from revenue enhancements will fall.A While unemployed people do non work, make non gain, and therefore they do non pay taxes.A This affects in the lessening of the degree of income that the authorities collects.A On the other manus, the authorities should assist the unemployed by giving them economic assistance.4A In Fig 7 is presented the figure of households having economic assistance versus the entire figure of families in all territories of Albania.

Fig 7: Families having economic assistance versus the entire figure of families

Beginning: Ministry of Social Work and Issue and Equal Opportunity ( 2008 )

____________________ 4 scribd: Unemployment. Url: hypertext transfer protocol: //www.scribd.com/doc/2442169/Chp-11-Unemployment

It is noted that the highest per centum of the households that profit economic assistance is in Kukes. As we said before, the unemployment rate in this territory is besides the highest of all territories in Albania. Dibra, Shkodra and Lezha have besides high per centums of households with economic assistance and the degrees of unemployment in these territories are high. Durres, Fier, Tirana and Vlora have the lowest degree of households in economic assistance. But we have seen that Vlora had a high degree of unemployment, although the per centum of households in economic assistance is in lower degrees.

So the authorities loses as a consequence of the diminution in revenue enhancement aggregation and higher disbursement on households who have unemployed members. As a consequence the budget shortage may be increased, which increases and the hazard of the authorities. These are some grounds that the degree of authorities adoption may increase. So we can state that all the society and the economic system suffer from high degrees of unemployment.

Precaution OF THE GOVERNMENT

The authorities has to interfere continually to cut down the unemployment rate. The Albania ‘s authorities has taken some safeguards to abject the degree of unemployment. We can advert the gap of new workplaces, such as in substructure. The last old ages the authorities has realized a batch of undertakings in substructure and in this manner, there are opened new workplaces. Besides the authorities has practiced preparation and plan applications to hike employment. As we have said in Albania the figure of unemployed females is greater than unemployed males, and so the authorities has practiced free vocational preparation for adult females caputs, victims of trafficking and roma adult females.

Reforms in the financial system, in the betterment of the concern environment by take downing revenue enhancements significantly, investings in substructure and the attracting of foreign investors to put in Albania, promoting investors to use staff from Albania are the chief factors that has contributed to the economic growing and, accordingly, to the creative activity of new workplaces. So these are the chief safeguards that our authorities has taken to forestall and cut down the unemployment in Albania.5

Decision

Unemployment is an inevitable procedure that happens in every state. It is found in different types such as frictional, structural, cyclical, seasonal, voluntary and concealed unemployment. This phenomenon is seeable in every society, but it appears in different values.

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5 Ministry of Social Work and Issue and Equal Opportunity ( 2007 ) : Strategji-Standarte/Strategjia vitamin E Punesimit. Url: hypertext transfer protocol: //www.mpcs.gov.al/images/stories/ministria/downloads/strategji-standarte/plani_i_veprimeve_per_zbatimin_e_strategjise_se_punesimit2006-2013.zip

Although Albania ‘s recent economic growing has reduced poverty degree, it is still a state with a higher rate of unemployment. This rate has been altering over old ages. It has been in its lowest degrees in 1996 with 12.3 % . The highest rate has been in 1999 with a value of 18.4 % and from so it has been cut downing continually. In 2008 this rate was 13 % . It ‘s non a low degree, but anyhow is the lowest degree Albania has of all time had in the last 10 old ages. Harmonizing to gender the per centum of unemployed females in Albania has been higher than the per centum of males. Harmonizing to age, the degree of unemployment has been higher for the age group 15-19 old ages old boulder clay 2001, and since so it has been higher for the age group 20-34 old ages old. Whereas the age group over 34 old ages old is ever characterized of lower degrees of unemployment harmonizing to the other age groups. Unemployment rate harmonizing to instruction has been higher for people with high school instruction boulder clay 2001, and from so it has been higher for people with octennial instruction. Whereas people with university instruction are characterized of lower degrees of unemployment. In different territories are recorded different values. Its value is higher in Kukes and lower in Tirana.

The unemployment brings a batch of affects in the society and the whole economic system. It reduces the human capital value and increases to malnutrition, unwellness, mental emphasis, and loss of self-esteem, taking to depression. It increases the figure of divorces, offense and the degree intoxicant maltreatment. The unemployment brings the decrease of the state ‘s economic growing. It reduces the degree of the incomes that could be taken from revenue enhancements and increases the outgo for economic assistance given by the authorities for the unemployed people.

The authorities has taken some safeguards to cut down the degree of unemployment ; such are the reforms in the financial system or by opening new workplaces. It has practiced preparation and plan applications to hike employment. The per centum of unemployed females is in high degrees, so the authorities has practiced free vocational preparation for adult females. Besides it has taken reforms in the financial system, in the betterment of the concern environment by take downing revenue enhancements significantly, investings in substructure and the attracting of foreign investors to put in Albania, promoting investors to use staff from Albania.